Tropical Cyclone Veronica, a Category 4 storm, is heading for the Western Australian iron ore export ports in the Pilbara, especially Port Headland, and the LNG export gas hub at Karratha.
The Pilbara Ports Authority said late on Thursday has started clearing the major berths at Port Headland and Dampier sending ships to sea to ride out the storm.
That means exports of iron ore, salt, and spodumene (lithium ore) will be suspended until further notice.
The Port Authority said in a statement late yesterday:
“All Pilbara Ports Authority operations are in the process of being shut down. This allows for cyclone contingency plans to be implemented and provides for large ships to proceed to sea and head to safe water.
“This is a normal part of port operations in the Pilbara and we have robust cyclone preparedness plans in place.”
“Pilbara Ports Authority has commenced cyclone preparations across the ports of Ashburton, Dampier and Port Hedland.
“The ports will begin clearing anchorages and berths in a staged and sequential manner.
“The Port of Ashburton is expected to be cleared by 0800 (AWST) on 22 March 2019.
“The Port of Dampier is expected to be cleared by 1800 (AWST) on 21 March 2019.
“The Port of Port Hedland has commenced clearing and will continue to do so until all anchorages and the inner harbour are cleared.”
Port Hedland is the largest iron ore export port in the world. its shutdown is expected to have a knock-on impact on global prices, especially if there is any threat to facilities at the port or in the port of Dampier.
Veronica is already a category 4 storm and is expected to strengthen to a category 5 system (the highest) later today.
The news will impact global iron ore prices with two of the market’s three major ports closed, possibly until Sunday or Monday if Veronica misses the region or weakens.
Even so the weather bureau in Perth warned last night that “a severe coastal impact is likely” and that “the current warning zone covers Pardoo to Mardie including Port Hedland, Karratha, and Barrow Island” (Where the Gordon LNG plant is based).
The impact of the cyclone comes as there’s more confusion about the extent of the production cuts in Brazil in the southern mining areas of Vale and what it means for iron ore pricing.
Vale said late Wednesday that up to 10 million extra tonnes of production are likely to be lost due to due to the suspension of operations at its Alegria mine in Minas Gerais state.
The mine was suspended “on a preventive basis”, because the results of a preliminary analysis of its structures were inconclusive under stress conditions, and as such, were unable to confirm its stability, the world’s biggest iron ore producer said in a statement.
That adds to the confusion caused by a Brazilian court okaying the resumption of operations at Vale’s Brucutu mine, its largest iron ore facility in the state of Minas Gerais.
Operations at Brucutu – a 30 million tonnes a year mine – have been suspended since early February following a deadly mining accident at a separate facility operated by Vale on June 25. That mine produced 11.8 million tonnes of ore last year.
But Brazilian analysts say Vale still requires approval from SEMAD (local government environmental regulator) to restart operations and that has not been forthcoming.
Vale currently has 83 million tonnes of iron ore capacity closed, including 30 million tonnes from Brucutu.
A separate court ruling on Monday will also allow Vale to resume iron ore loading at its Ilha Guaíba export terminal in Mangaratiba, from where it exports around 40 million tonnes of iron ore a year.
As a result of that news, the Metal Bulletin price for 62% fines skidded 3.4% to $84.30 a tonne, completely reversing gains seen over the past week. It was the largest percentage decline since November 26 last year when the current rally started.
Iron ore prices hardly moved on Thursday despite the latest Vale news and the storm off the Pilbara coast
The Metal Bulletin 62%. iron ore index price rose 19 cents to $US84,49 a tonne,
